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FLAG SAND AND GRAVEL CO. <br />NOVEMBER 24, 2008 <br />PAGE 2 <br />ponds developed in 2006 (dark blue). Limited reclamation is <br />needed in the current mining area since the slopes are <br />shaped as mining progresses only the above water slopes will <br />need revegetation. Topsoil is stored along the perimeter of <br />the mined area and the river for use in resoiling the <br />slopes. We continue to monitor revegetation done on the <br />north shore of the west lake area. <br />(3) Mining will continue east of the Plant Site in the area <br />colored purple. We expect to continue to mine on the floor <br />of the partially mined area and will strip an additional <br />7.20 acres ± next year. We will continue to monitor the <br />west lake slopes and do remedial work if it is necessary. <br />(4) No reclamation is required next year in the Plant Site area <br />or in the mining area east of it. The western parcel may <br />have additional seeding done as needed on the above water <br />slopes next year. <br />(5) The bond was evaluated in 1999 and set at $55,400. Review <br />of that evaluation and this annual report show that less <br />area is disturbed at this time than existed in 1999. Recla- <br />mation, except seeding, is complete on the western 59.81 <br />acres ± of the site. The total disturbance on above water <br />areas at this time is 21.61 acres ±, which is less then <br />allowed under the current bond. We feel bond is adequate to <br />cover all reclamation requirements for this year. <br />The effective date of all information contained in this <br />report is November 19, 2008. If you have any questions please <br />call me. <br />Sincerely, <br />red Frei <br />President <br />cc file <br />Environment, Inc. <br />enclosure